FEDERAL ELECTION COMMISSION

Washington, DC 20463

March 30, 2023

ADVISORY OPINION 2023-02

Joseph M. Birkenstock, Esq.

Sandler Reiff Lamb Rosenstein & Birkenstock, P.C. 

1090 Vermont Ave. N.W., Suite 750

Washington, DC 20005

Dear Mr. Birkenstock:

We are responding to your advisory opinion request on behalf of Humana Inc.

(“Humana”) and its separate segregated fund, Humana, Inc. PAC (“Humana PAC”), concerning 

the application of the Federal Election Campaign Act, 52 U.S.C. §§ 30101-45 (the “Act”), and 

Commission regulations to the affiliation status of Humana PAC with KAH Hospice Company 

Inc. (“KAH Hospice”), and its separate segregated fund, KAH Hospice PAC. 

The Commission concludes that Humana and KAH Hospice, and their respective separate 

segregated funds, are no longer affiliated.

Background

The facts presented in this advisory opinion are based on your letter received on February 

17, 2023.

In August 2021, Humana acquired Kindred at Home, a combined home health and 

hospice company. At that time, Gentiva Health Services, Inc. (“Gentiva”), a Humana subsidiary,

“was the principal holding company within Humana for both the home health business and the 

hospice business, operating through a number of subsidiaries and serving as the connected 

organization” for what was then Gentiva Health Services Inc. PAC (“Gentiva PAC”).

1

 Both 

Humana and Gentiva amended the FEC Form 1, Statement of Organization for their respective 

separate segregated funds to list each other as affiliated entities.

At the time it acquired Kindred at Home, in 2021, Humana announced that it intended to 

maintain only a minority interest in Kindred at Home’s hospice business but would retain in full 

Kindred at Home’s home health business. Humana then reorganized Kindred at Home’s 

1 Advisory Opinion Request (“AOR”) at 001.
AO 2023-02 (Humana) 

Page 2 

business, creating KAH Hospice and transferring to it the entities and assets of Kindred at 

Home’s hospice business. On August 11, 2022, Humana sold a 60% controlling interest in KAH 

Hospice to a private equity firm Clayton, Dubilier & Rice (“CD&R”).

2

 The sale was 

accomplished via a limited partnership, Falcon Hospice, L.P., the general partner in which is a 

limited liability company, Falcon Hospice GP, LLC (the “LLC”), owned jointly by CD&R 

(60%) and Humana (40%). The LLC has “plenary authority over Falcon Hospice, L.P.,”3 which 

in turn exercises control over its subsidiaries, including, KAH Hospice.4 The LLC is governed 

by a seven-member Board of Directors (“Board”). Four of the Board members are appointed by 

CD&R, two by Humana and the seventh member is the CEO of KAH Hospice.5 

 Following Humana’s acquisition of Kindred at Home and creation of KAH Hospice, 

certain members of the Kindred at Home management team and personnel aligned with hospice 

operations were realigned to and employed by KAH Hospice. While the KAH Hospice 

employees were under the Humana, Inc. umbrella between August 2021 and August 2022, no 

KAH Hospice personnel have an employment relationship with Kindred at Home or Humana 

post-spinoff.6 

 Since the spin off, KAH Hospice has become the connected organization for the former 

Gentiva PAC (now operating under its new name, KAH Hospice PAC).7 KAH Hospice PAC is 

managed and operated by its treasurer in cooperation with key business leaders within the 

restricted class8 of the committee’s connected organization (KAH Hospice). Humana PAC is 

run by a PAC Board elected by Humana’s restricted class. “Neither [Humana’s nor KAH 

Hospice’s] PAC operations (either overall or on a day-to-day basis) include any involvement by 

the other corporation or the other PAC.”9

2

 CD&R has “no management or significant ownership overlap with Humana Inc.” and “engag[es] in the 

KAH [Hospice] transaction solely as an arm’s length investor and business partner.” AOR002, n.1. 

3

 AOR002

4

 Id. 

5

 Id. 

6

 See AOR004.

7

 See KAH Hospice PAC FEC Form 1, Statement of Organization, filed on August 10, 2022. 

https://docquery.fec.gov/cgi-bin/forms/C00407080/1622810/ . 

8

 A corporation’s restricted class is made up of its stockholders, executive and administrative personnel, and 

their families. 11 C.F.R. §§ 114.1(j), 114.5(g).

9

 AOR004.
AO 2023-02 (Humana)

Page 3

The following diagram illustrates the business connections between Humana Inc. and 

KAH Hospice Company, Inc.

The terms of the sale transaction provide that as long as Humana’s equity interest in 

KAH Hospice remains at least 50% of the amount it owned at closing (i.e. half of 40%) and 

amounts to at least 15% of the then-outstanding stock in KAH Hospice, it will retain a right of 

approval on certain actions including: 1) Any waiver or amendment to the Stockholders 

Agreement, charter or by-laws or similar constituent documents that (i) adversely and 

disproportionately affects Humana relative to CD&R or (ii) amends special rights expressly 

granted to Humana; 2) non-pro rata distributions, dividends, redemptions, or repurchases (other 

than ordinary course employee stock repurchases in connection with a termination of 

employment); 3) transactions with CD&R (or its affiliates) other than (i) ordinary course 

transactions between portfolio companies of CD&R and KAH Hospice on arm’s-length terms, or 

(ii) issuances of equity or equity-like securities of KAH Hospice with respect to which Humana 

has received an opportunity to participate pursuant to its preemptive rights; 4) approval of annual 

budget, provided that in the absence of approval, the budget will be 107.5% of the annual budget 

for the immediately preceding year; 5) hiring and firing, or material changes in compensation of 

the CEO of KAH Hospice; 6) incurrence of indebtedness if such debt would result in KAH 

Hospice’s debt being greater than 7.5x last twelve months of earnings before interest, taxes, 

depreciation, and amortization; 7) settling litigation for over $35 million; or 8) authorizing or 

entering into these transactions.10

These rights are imposed by the Falcon Hospice GP LLC agreement, which disallows the 

general partner from taking these actions without the “Required Consents” of the Humana 

10 See AOR005.
AO 2023-02 (Humana) 

Page 4 

Member of the partnership.

11,12 While Humana retains the right of approval over these actions, it 

may not initiate any of them. For example, Humana’s only authority over decision making 

employees is “the right to approve a change of the CEO, or of the CEO’s compensation, but it 

has no authority to fire, demote, remove, or otherwise exercise control over the CEO or any other 

KAH Hospice personnel.”13 

Neither Humana nor KAH Hospice owns a controlling interest in the voting stock or 

securities of the other. Humana’s shareholder base will not overlap with that of KAH Hospice 

other than to the extent that Humana itself is the minority owner of KAH Hospice. 

Humana and KAH Hospice will not share any officers or employees other than the two 

Humana executives who are appointed to the seven-member Board of KAH Hospice. 

Further, while there is nothing in the sale agreements that “precludes Humana from 

providing addition[al] debt funding capital investment, or administrative support to KAH,”14 and 

while Humana holds a minority proportion (approximately 15%) of the overall debt syndicate 

that resulted from the sale, “there are no plans to provide additional debt or other capital funding 

to KAH Hospice, and no plans to provide direct or indirect administrative, fundraising, or other 

support to either KAH Hospice itself or to KAH Hospice PAC.”15 

Additionally, the request explains that any continued business between Humana and 

KAH Hospice will “flow from the two companies conducting their business operations in the 

normal course.” For example, when the home health business identifies a patient who may be 

appropriate for transition to hospice, the decision of hospice agency is made by the patient and 

their independent primary care physician. If neither has a preference, the home health business 

will assist with identifying a hospice agency (leaving the ultimate decision to the patient and the 

patient’s independent physician). “The selection of a hospice agency is based on a multitude of 

factors, including the [ ] agency’s licensed coverage area and capacity, is made on a case-by-case 

basis at the patient level and is not tracked by the home health business at the corporate level.”16

Finally, the request contained a letter from Ronald C. Lazas, Jr., Treasurer of KAH

Hospice PAC, stating that both KAH Hospice and KAH Hospice PAC “concur in the facts and 

analysis presented” in Humana’s request and “ask that the Commission conclude that Humana, 

11 AOR005 (emphasis in original). 

12 Section 3.9 of the LLC agreement for the General Partnership also generally allows CD&R to initial an 

Initial Public Offering of Falcon Hospice regardless of Humana’s consent if certain conditions have been met. 

13 Id. 

14 AOR006, n.7.

15 AOR006.

16 Id. 
AO 2023-02 (Humana)

Page 5

Inc. Political Action Committee and KAH Hospice Company Inc. PAC are no longer affiliated in 

accordance with the applicable law and regulation.”17

Question Presented

In light of the spinoff of KAH Hospice by Humana, are Humana PAC and KAH Hospice 

PAC now disaffiliated for purposes of the Act?

Legal Analysis 

Yes, Humana and KAH Hospice, and their respective separate segregated funds, are now 

disaffiliated under the Act and Commission regulations. 

Political committees, including separate segregated funds, are “affiliated” if they are 

established, financed, maintained, or controlled by the same corporation, labor organization, 

person, or group of persons, including any parent, subsidiary, branch, division, department, or 

local unit thereof. See 52 U.S.C. § 30116(a)(5); 11 C.F.R. §§ 100.5(g)(2), 110.3(a)(1)(ii). For 

purposes of the Act’s contribution limits, contributions made to or by affiliated political 

committees are considered to have been made to or by a single political committee. See 52 

U.S.C. § 30116(a)(5); 11 C.F.R. §§ 100.5(g)(2), 110.3(a)(1).

Commission regulations identify certain committees that are per se affiliated, such as 

those established, financed, maintained, or controlled by a single corporation and its subsidiaries. 

See 11 C.F.R. §§ 100.5(g)(3)(i), 110.3(a)(2)(i). The Commission has previously found that a

parent-subsidiary relationship, and thus per se affiliation, is created when a parent company 

owns a majority interest in another organization.18 Consistent with this precedent, KAH Hospice 

is not per se affiliated with Humana because Humana does not own a majority interest in KAH 

Hospice. 

In the absence of per se affiliation, the Commission examines “the relationship between 

organizations that sponsor committees, between the committees themselves, [and] between one 

sponsoring organization and a committee established by another organization to determine 

whether committees are affiliated.” See 11 C.F.R. § 100.5(g)(4)(i). Commission regulations 

provide a non-exhaustive list of ten “circumstantial factors” to be considered “in the context of 

the overall relationship” in order to determine whether the respective entities are appropriately 

considered affiliated. See 11 C.F.R. §§ 100.5(g)(4)(i)-(ii), 110.3(a)(3)(i)-(ii).

17 AOR009.

18 See Advisory Opinion 2003-28 (Horizon Lines) (finding per se affiliation where corporation owned 

controlling interest in LLC); see also Advisory Opinion 2003-21 (Lehman Brothers Holdings) (finding that minority 

ownership interest in corporation does not create parent-subsidiary relationship).
AO 2023-02 (Humana) 

Page 6 

The Commission considers the ten circumstantial factors in turn.

 

(A) Controlling Interest 

This factor considers whether a sponsoring organization owns a controlling interest in the 

voting stock or securities of the other sponsoring organization. 11 C.F.R. §§ 100.5(g)(4)(ii)(A), 

110.3(a)(3)(ii)(A). You represent that “[n]either Humana nor KAH Hospice owns a controlling 

interest in the voting stock or securities of the other entity.”19 

Accordingly, the absence of such ownership weighs in favor of concluding that Humana 

and KAH Hospice are not affiliated. 

(B) Governance 

This factor concerns whether a sponsoring organization has the authority or ability to 

direct or participate in the governance of the other sponsoring organization or its committee

through provisions of constitutions, bylaws, contracts, or other rules, or through formal or 

informal practices or procedures. 11 C.F.R. §§ 100.5(g)(4)(ii)(B), 110.3(a)(3)(ii)(B). 

Humana holds fewer than one-third of the seats on the Board of Directors governing 

KAH Hospice, and has only half the number of seats held by CD&R. Of the seven Members of 

the Board of Directors, Humana appoints two while CD&R appoints four and the seventh 

Member is the CEO of KAH Hospice.20 Further, as explained above, Humana has the right of 

approval on certain governing actions. The request explains that these are “typical ancillary 

rights” to provide basic protection of Humana’s minority ownership while not allowing Humana 

to exercise actual control.21 While these rights do indicate some influence in the governance of 

KAH Hospice, “nothing in the [sale] or elsewhere provides Humana with any ability to initiate

any of those actions.”22 

Although Humana participates in the governance of KAH Hospice through its two 

representatives on the seven-member Board of Directors, Humana controls less than one-third of 

the entire Board membership. The Commission has previously concluded that it will not accord 

significant weight to such minority representation on the Board of Directors when analyzing 

affiliation under this factor.23 Thus, while Humana participates in the governance of KAH

Hospice through its Board representatives, Humana lacks the authority to direct the governance 

KAH Hospice or its separate segregated fund. Accordingly, this factor does not weigh heavily in 

19 AOR004.

20 AOR002.

21 See AOR006.

22 AOR005 (emphasis in original). 

23 See, e.g., Advisory Opinion 2016-02 (Enable) at 7 (concluding that representation amounting to one-quarter 

control of the board of directors does not “weigh heavily” under the governance factor). 
AO 2023-02 (Humana)

Page 7

the Commission’s analysis.

(C) Hiring Authority

This factor concerns whether a sponsoring organization has the authority or ability to 

hire, appoint, demote, or otherwise control the officers or other decision-making employees of 

the other sponsoring organization. 11 C.F.R. §§ 100.5(g)(4)(ii)(C), 110.3(a)(3)(ii)(C). The 

Commission previously concluded that controlling only a minority interest on the Board of 

Directors indicated that the sponsoring organization lacked the authority to take hiring actions on 

its own and thus this factor weighed against affiliation.24 Here, although Humana holds the right 

of approval over certain hiring actions with respect to the CEO of KAH Hospice, “it has no 

authority to fire, demote, remove or otherwise exercise control over the CEO or any other KAH 

Hospice personnel.”25 Accordingly, this factor weighs against affiliation. 

(D) Common Membership

Humana and KAH Hospice are not labor organizations, membership organizations, 

cooperatives, or trade associations. Accordingly, this factor does not apply.

26

(E) Common Officers or Employees 

Factor (E) considers whether sponsoring organizations have common or overlapping 

officers or employees, indicating a formal or ongoing relationship between the organizations. 

11 C.F.R. §§ 100.5(g)(4)(ii)(E), 110.3(a)(3)(ii)(E). Where two organizations have no common 

officers or employees, this factor weighs against affiliation.27 

Aside from the two Humana executives who serve on the Board of Directors governing 

KAH Hospice, no current KAH Hospice officers or employees have employment relationships 

with either Kindred at Home or Humana. Accordingly, this factor weighs against affiliation. 

(F) Former Officers or Employees

Factor (F) concerns whether a sponsoring organization has any members, officers, or 

employees who previously were members, officers, or employees of the other sponsoring 

organization, indicating a formal or ongoing relationship or the creation of a successor entity. 

11 C.F.R. §§ 100.5(g)(4)(ii)(F), 110.3(a)(3)(ii)(F). 

24 See Advisory Opinion 2016-02 (Enable) at 7; Advisory Opinion 2014-11 (HCSC) at 5.

25 AOR005.

26 See Advisory Opinion 2016-02 (Enable) at 7-8; Advisory Opinion 2014-18 (Rayonier Advanced Materials) 

(“Rayonier”) at 7.

27 See, e.g., Advisory Opinion 2016-02 (Enable) at 6. 
AO 2023-02 (Humana)

Page 8

Although retaining former employees may in some circumstances indicate an ongoing 

relationship,28 the Commission has placed less emphasis on this factor when analyzing affiliation 

of entities that have undergone significant business restructuring. The Commission has 

determined that a company following a spin-off was not affiliated with its former parent 

company where more than 90% of the spun-off company’s employees were former employees of 

the parent company.29 The Commission reasoned that this did not indicate a formal or ongoing 

relationship because such employment was a “necessary consequence of a parent company 

spinning off a business unit.”30

Here, similarly, the former Kindred at Home employees now employed by KAH Hospice 

were under the Humana umbrella for approximately one year. These employees appear to be “no 

more than the necessary consequence of”31 having restructured Kindred at Home to create KAH 

Hospice as a new business entity and then spun that entity off. Under these circumstances, this 

factor does not weigh in favor of affiliation.

(G - H) Providing Funds or Goods and Arranging for the Provision of Funds or Goods

Factor (G) considers whether a sponsoring organization provides funds or goods in a 

significant amount or on an ongoing basis to the other sponsoring organization or committee. 

11 C.F.R. §§ 100.5(g)(4)(ii)(G), 110.3(a)(3)(ii)(G). When evaluating this factor, the 

Commission has looked at whether the entities “fund or otherwise support” each other’s SSF.

32 

Factor (H) concerns whether a sponsoring organization causes or arranges for funds or goods to 

be provided to the other sponsoring organization in a significant amount or on an ongoing basis. 

11 C.F.R. §§ 100.5(g)(4)(ii)(H), 110.3(a)(3)(ii)(H). 

While Humana does hold a minority proportion (15%) of KAH Hospice’s overall debt 

syndicate resulting from the sale (meaning Humana has no ability to control that syndicate), 

there are no plans for it to provide additional debt or other capital funding to KAH Hospice, and 

no plans to provide direct or indirect administrative, fundraising, or other support to KAH 

Hospice itself or to KAH Hospice PAC. 

Accordingly, because Humana holds only a small portion of KAH Hospice’s debt 

syndicate and does not plan to fund KAH Hospice or its PAC on an ongoing basis, these factors 

weigh against finding that the entities are affiliated.

28 See, e.g., Advisory Opinion 2004-23 (U.S. Oncology Good Government Committee) at 7.

29 See Advisory Opinion 2014-18 (Rayonier) at 7; see also, Advisory Opinion 2016-02 (Enable) at 8.

30 Advisory Opinion 2014-18 (Rayonier) at 7. 

31 Advisory Opinion 2016-02 (Enable) at 8.

32 Advisory Opinion 2012-21 (Primerica) at 9, 11 (noting entity’s lack of support for other entity’s SSF as 

indicating disaffiliation under factor (G)).
AO 2023-02 (Humana) 

Page 9 

(I) Formation 

This factor involves whether a sponsoring organization or committee or its agent had an 

active or significant role in the formation of the other sponsoring organization. 11 C.F.R. 

§§ 100.5(g)(4)(ii)(I), 110.3(a)(3)(ii)(I). 

As described above, Humana played a significant role in the formation of KAH Hospice 

by separating it from its subsidiary Kindred at Home and spinning it off. However, “when the 

formation results from a completed business restructuring . . . the Commission has found that 

this factor does not require” a finding of affiliation between the entities.33 The spinoff of KAH 

Hospice resulted in nearly complete separation of corporate leadership (the only overlap being 

the two Humana executives appointed to the Board of Directors governing KAH Hospice) and 

complete separation of personnel (“no KAH Hospice personnel have an employment relationship 

with Kindred at Home (or Humana) post spin off”). Given the complete separation of business 

operations following the restructuring, Humana’s role in the formation of KAH Hospice does not 

require a finding that the entities are affiliated.

 (J) Contribution Patterns 

This factor pertains to whether the sponsoring organizations’ SSFs have similar patterns 

of contributions or contributors that would indicate a formal or ongoing relationship between the 

sponsoring organizations or committees. 11 C.F.R. §§ 100.5(g)(4)(ii)(J), 110.3(a)(3)(ii)(J). 

After the August 2022 restructuring and through the end of 2022, KAH Hospice PAC has 

not reported making any contributions to federal candidates or other political committees. 

Similarly, KAH Hospice PAC has not reported receiving any contributions from KAH Hospice 

employees over the same period.

34 

 The request addresses this factor by noting that both Humana and KAH Hospice make 

their own decisions about contributions and expenditures of their separate segregated funds. 

Neither company participates in the decision-making or day-to-day operations of the other’s SSF 

and “any similar pattern of contributions between the two would result only from their common 

participation in the health care industry.”35

 Further, the lack of overlap in their executive and administrative personnel (aside from 

the two Humana executives on the Board governing KAH Hospice), leaves “the vast majority of 

33 Advisory Opinion 2016-02 (Enable) at 9; see also Advisory Opinion 2012-21 (Primerica) at 11 (concluding 

that corporation’s involvement in formation of a spun off company resulting in “nearly complete separation of 

corporate leadership and personnel” did not require finding affiliation); Advisory Opinion 2007-12 (Tyco 

International Management Company Employee PAC) at 7 (same).

34 See KAH Hospice PAC FEC filings: October Quarterly, Pre-General Election, Post-General Election, and 

Year-End at https://www.fec.gov/data/committee/C00407080/?tab=filings 

35 AOR004. 
AO 2023-02 (Humana)

Page 10

their restricted classes completely separate, all but categorically eliminating the prospect of any 

similar pattern of contributors” to the two PACs.36 

Accordingly, because presently the sponsoring organizations’ SSFs do not appear to have 

similar patterns of contributions or contributors, this factor indicates a lack of affiliation.

Context of the Overall Relationship Between the Entities

In considering the foregoing circumstantial factors, the Commission examines the 

“context of the overall relationship” between the entities to determine whether they are properly 

considered affiliated. See 11 C.F.R. §§ 100.5(g)(4)(i)-(ii), 110.3(a)(3)(i)-(ii). 

In this instance, the only factors weighing in favor of affiliation are the facts that Humana 

participates on the Board of Directors governing KAH Hospice through its two Board 

representatives, and that it holds a right of refusal over certain Board actions in order to protect 

its minority interest. But given that Humana holds less than one-third of the Board seats and that 

the right of refusal is mitigated by the inability of Humana to direct or control any of these 

actions, these facts do not weigh heavily. That neither Humana nor KAH Hospice owns a 

controlling interest in the other, and do not have common officers or employees, weighs against 

finding affiliation. Further, the fact that Humana has no plans to fund KAH Hospice or its PAC 

on an ongoing basis also weighs against finding affiliation between the entities. 

Further, it appears that any ongoing business between Humana and KAH Hospice will 

occur in the normal course of operations between a home health care agency and a hospice 

agency. The request states that while the home health agency may assist in finding appropriate 

hospice agencies for a patient, the decision rests entirely with the patient and the patient’s 

independent physician, not with the home health agency. 

Finally, by letter appended to the request, KAH Hospice and KAH Hospice PAC “concur 

in the facts and analysis presented to the FEC in Humana’s present request, and likewise ask that 

the Commission conclude that Humana, Inc. Political Action Committee and KAH Hospice 

Company, Inc. PAC are no longer affiliated in accordance with the applicable law and 

regulation[s].” 37

Accordingly, on balance, after considering the circumstantial factors in the context of the 

overall relationship between the entities involved, the Commission concludes that Humana and 

KAH Hospice and their SSF’s are no longer affiliated. 

36 AOR004-5. 

37 See AOR009. Letter from Ronald C. Lazas, Jr., Treasurer, KAH Hospice Company, Inc. PAC.
AO 2023-02 (Humana) 

Page 11 

 This response constitutes an advisory opinion concerning the application of the Act and 

Commission regulations to the specific transaction or activity set forth in your request.38 The 

Commission emphasizes that, if there is a change in any of the facts or assumptions presented, 

and such facts or assumptions are material to a conclusion presented in this advisory opinion, 

then the requestor may not rely on that conclusion as support for its proposed activity. Any 

person involved in any specific transaction or activity which is indistinguishable in all its 

material aspects from the transaction or activity with respect to which this advisory opinion is 

rendered may rely on this advisory opinion.39 Please note that the analysis or conclusions in this 

advisory opinion may be affected by subsequent developments in the law including, but not 

limited to, statutes, regulations, advisory opinions, and case law. Any advisory opinions cited 

herein are available on the Commission’s website.

On behalf of the Commission, 

Sean J. Cooksey 

Vice Chairman

38 See 52 U.S.C. § 30108.

39 See id. § 30108(c)(1)(B).